Mitt Romney: It's fair I pay a lower tax rate than people making $50,000

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34. that's not technically true, although i certainly agree all income should be taxed the same.

labor expenses are deductible from corporate taxes. so if a corporation pays out all its revenue in wages and salary, then it pays zero income. only the employees pay income taxes.

if, however, a shareholder pays capital gains taxes, presumably the stock went up in value (although the capital gain could be from a successful short), which in turn presumably happened because the company made a profit (although stock prices are based primarily on future expectations, not solely on past performance), and the company presumably paid taxes on that profit.

but i agree with the conclusion that the bottom line is that money is generally taxed WHENEVER it changes hands from one legal entity to another, which even includes the gift tax and the estate tax. deductions for business expenses and charitable contributions are the exception, not the rule, and they're there for specific policy reasons. there's nothing especially deserving about capital gains and dividends that should qualify them for exceptional treatment.